Appraisals of Unique Facilities

Challenge

Clients often find their way to Binswanger when they need an appraisal for a unique property that doesn’t have many comparable properties in the area. As a result, Binswanger is regularly tapped to evaluate correctional facilities, universities, and hotels and other specialized properties. In May of 2019, Binswanger was asked to provide an appraisal needed for a tax appeal on behalf of Kalahari Waterpark and Resort in the Pocono mountains of Pennsylvania. The tax appeal was needed to establish market value for the resort as part of a country-wide reassessment. Kalahari is certainly unique; situated on 150 acres, it is the largest indoor waterpark in the U.S. The valuation of a resort – especially one of this size – is a challenging one because it encompasses a wide range of income sources. For tax assessment purposes, extracting out value pertaining only to taxable real estate is difficult since revenue from stays, food and beverage, retail sales, game room, and the waterpark are co-dependent and intertwined. The long and detailed process of valuing a property for tax purposes requires niche expertise.

Solution

Chris Hall, President of the Appraisal Services division of Binswanger has more than 20 years of experience in performing real estate valuations for disposition, financing, investment analysis, sale-leaseback transactions, tax assessment consulting and appeals, and expert testimony. In the case of Kalahari Resort and Waterpark, Mr. Hall provided the appraisal report, which involved an extensive amount of research. The team reviewed the 977-room full-service hotel, waterpark, convention center, restaurants and all related amenities that were constructed between 2015 and 2017. In developing an opinion of market value, comparable market data was verified and analyzed within this process. The Appraisal Report summarized a description of the subject property, the pertinent market data used in the appraisal process, and the appraiser’s conclusions.

Result

Mr. Hall is often asked to defend his property valuations in a hearing and the situation for Kalahari Resort and Waterpark was no different. Mr. Hall argued for a substantial reduction in the tax assessment since an alternative use for the property is slim. The hearing resulted in a favorable outcome for Kalahari with a reduced tax liability.